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Kathaleen McCormick

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Kathaleen McCormick
Official headshot, 2019
Chancellor of the Delaware Court of Chancery
Incumbent
Assumed office
May 6, 2021
Appointed byJohn Carney
Preceded byAndre Bouchard
Vice Chancellor of the Delaware Court of Chancery
In office
November 1, 2018 – May 6, 2021
Appointed byJohn Carney
Preceded bySeat established
Succeeded byLori W. Will
Personal details
Born
Kathaleen Saint Jude McCormick

(1979-09-09) September 9, 1979 (age 45)
Alma materHarvard University (AB)
University of Notre Dame (JD)
Known forTwitter v. Musk

Kathaleen Saint Jude McCormick[1] (born 1979)[2] is an American lawyer and judge on the Delaware Court of Chancery, first as a vice chancellor from 2018 to 2021 and then as the current chancellor since 2021. She is the first female chancellor in Delaware history.

Career

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McCormick was born in Dover, Delaware, and grew up in Smyrna, Delaware.[3] She earned a Bachelor of Arts in philosophy from Harvard University,[when?] and her Juris Doctor from Notre Dame Law School.[4] She began her career as a legal aid lawyer. She then went into private practice at Wilmington law firm Young Conaway Stargatt & Taylor, where she became a partner. At Young Conaway, she specialized in corporate and alternative entity law.[4][5]

In September 2018, Governor John Carney nominated McCormick and Morgan Zurn to two new vice-chancellor positions on the Delaware Court of Chancery. These appointments raised the total number of judges on the court from five to seven, the first such expansion since 1989.[6] Carney noted that McCormick's experience would make her "an immediate asset to the court."[5] She was confirmed by the Delaware Senate on October 3 and took office on November 1.[7][8][9]

In April 2021, she was nominated by Delaware Governor John Carney as Chancellor of the Delaware Court of Chancery, following the mid-term resignation of the former Chancellor Andre Bouchard. The Delaware Senate confirmed McCormick, and she began her 12-year term on May 6. McCormick is the first woman to lead the court since it was established in 1792.[10][11][9]

Notable cases

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On April 30, 2021, McCormick issued a post-trial decision in Snow Phipps Group, LLC v. KCake Acquisition, Inc.[12][13] The case was among the first "busted deal" cases that emerged as mergers and acquisitions buyers sought to avoid closing mergers after the COVID-19 pandemic negatively impacted the businesses of many merger targets.[14] The plaintiffs were Snow Phipps Group, LLC a private equity firm, and DecoPac Holdings, Inc., the parent company of KCake, a cake decorations company.[12] After the COVID-19 pandemic negatively impacted KCake's business, the defendant, Kohlberg & Co., sought to avoid its contractual obligation to complete a $550 million acquisition of KCake.[12] McCormick rejected Kohlberg's arguments that the COVID-19 pandemic resulted in a material adverse change or a breach of the ordinary course of business covenant in the merger agreement by the plaintiffs, then held that Kohlberg had breached its contractual obligation to use its "reasonable best efforts" to obtain financing for the transaction.[12] McCormick then ordered Kohlberg to close the transaction.[12]

On July 13, 2022, McCormick was assigned to adjudicate the merger dispute between Twitter, Inc. and Elon Musk, Twitter v. Musk.[15] Over Musk's objections, McCormick granted Twitter's motion for expedited treatment of the lawsuit and set a trial date for October 2022.[16] Twitter asked the court to enter an order of specific performance, effectively forcing Musk to close the deal.[17] Observers noted that in the KCAKE case in 2021, McCormick had granted the same relief that Twitter sought, forcing the buyer in that case to close the transaction.[17] With many legal commentators opining that Musk would lose the lawsuit, Musk agreed to close the transaction.[18] The deal closed on October 28, 2022.[19] Commentators praised McCormick's "no-nonsense approach" as having been instrumental in resolving the dispute.[20]

In January 2024, McCormick voided Elon Musk's $55 billion Tesla pay package in the case of Tornetta v. Musk, et al.[21][22] The lawsuit, filed in 2018 by Tesla shareholder Richard Tornetta, who owned nine shares, alleged that Tesla's board breached its fiduciary duties by approving Musk’s compensation package.[21] The package had been approved by Tesla shareholders in 2018 with approximately 73% of the vote.[23] Despite shareholder approval, McCormick ruled that the size of the pay package was extraordinary and raised concerns about its fairness.[24] In June 2024, following the court decision, Tesla shareholders reapproved the package with about 77% support.[25] However, McCormick reaffirmed her decision in December 2024, citing ongoing concerns about transparency and fairness in the deal.[26] In connection with the case, the plaintiff's attorneys initially sought a fee award of $5.6 billion, representing 29 million shares of Tesla stock, but McCormick awarded them $345 million in cash or Tesla shares.[21][22][23][25][26]

References

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  1. ^ "Disney's Bob Iger Says He Also Backed Out of Buying Twitter Over Bots". Gizmodo. September 8, 2022. Retrieved September 10, 2022.
  2. ^ Who Is Kathleen McCormick?
  3. ^ "Meet the judge who tamed the Musk-Twitter trial". AP News. October 14, 2022.
  4. ^ a b "Zurn, McCormick nominated for Chancery Court posts". Delaware Business Now. September 21, 2018. Retrieved January 22, 2019.
  5. ^ a b McParl, Tom (September 21, 2018). "Del. Gov. Names 2 Women for New Chancery Seats as Business Court Expands". Delaware Law Weekly. Retrieved January 22, 2019.
  6. ^ Hals, Tom (September 20, 2018). "Delaware governor nominates two for state's corporate court". Reuters.
  7. ^ Montgomery, Jeff. "McCormick, Zurn Confirmed To Complete Chancery Expansion". www.law360.com. Retrieved January 22, 2019.
  8. ^ "Law notes: Jacobs back at Young Conaway Project New Start, Morris Nichols, Richards Layton Finger". Delaware Business Now. October 23, 2018. Retrieved January 22, 2019.
  9. ^ a b "Judicial Officers - Court of Chancery - Delaware Courts - State of Delaware". courts.delaware.gov. Retrieved July 14, 2022.
  10. ^ Owens, Jacob (April 22, 2021). "Senate confirms McCormick to lead Chancery". Delaware Business Times. Retrieved May 29, 2021.
  11. ^ Owens, Jacob (April 9, 2021). "Carney taps McCormick, Will for Chancery". Delaware Business Times. Retrieved May 29, 2021.
  12. ^ a b c d e Salerno, Matthew; MacDonald, Mark; Langston, Jim (May 27, 2021). "Delaware Court Orders Up Prevention Doctrine to Require Reluctant Buyer to Close". Harvard Law School Forum on Corporate Governance.
  13. ^ Snow Phipps Gp., LLC v. KCake Acq., Inc., 2021 WL 2021 WL 1714202 (Del. Ch. April 30, 2021).
  14. ^ DiRisio, Matthew L.; Smith III, James P.; Peters, Daniel H. (May 11, 2020). "COVID-19-Spawned "Busted Deal" M&A Litigation and MAEs". Lexology.
  15. ^ "Twitter-Musk Case Assigned to Delaware Chief Judge McCormick". Bloomberg. July 13, 2022.
  16. ^ Milmo, Dan (July 19, 2022). "Twitter wins first legal battle with Elon Musk as trial to go ahead in October". The Guardian.
  17. ^ a b "How the spotlight-shy judge at the centre of Musk's battle with Twitter prevented the court fight becoming a circus". Fortune.
  18. ^ Milmo, Dan; Paul, Kari (October 4, 2022). "Elon Musk to proceed with $44bn buyout of Twitter after U-turn". The Guardian.
  19. ^ "Elon Musk takes control of Twitter in $44bn deal". The Guardian. October 28, 2022.
  20. ^ "How the spotlight-shy judge at the centre of Musk's battle with Twitter prevented the court fight becoming a circus". Fortune.
  21. ^ a b c "Court Says Elon Musk's $55B Tesla Pay Package Is 'Excessive'". Harvard Law School Forum on Corporate Governance. January 31, 2024.
  22. ^ a b "Judge Voids Musk's $55 Billion Pay Package, Citing Fiduciary Issues". Associated Press. January 31, 2024.
  23. ^ a b "Tesla Vote Approves Elon Musk's $55B Pay Package With 73% Support". Investor's Business Daily. 2018.
  24. ^ Judge voids Elon Musk's 'unfathomable' $56 billion Tesla pay package, Reuters, January 31, 2024
  25. ^ a b "Tesla Shareholders Reapprove Musk's Pay Package With 77% Support". Financial Times. June 2024.
  26. ^ a b "Judge Again Rejects Musk's Multibillion-Dollar Pay Plan". The Wall Street Journal. December 2024.
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